LONDON, April 13: Gold rose by just $1 on Friday despite a sharp drop in the dollar and firm oil prices, and analysts said the metal was vulnerable to profit-taking due to its failure to hold key levels.

Spot gold was quoted at $676.80/677.80 an ounce versus $675.80/$676.30 late in New York on Thursday.

The metal hit a six-week high of $681.30 on Tuesday.

It's running out of steam for the time being and there needs to be something else to support it.

The dollar is clearly not enough for the moment, said Stephen Briggs, economist at SG Corporate and Investment Bank.

There is a risk that if we continue to fail through roughly $680, then there is a risk of disillusion and some liquidation.

The euro hit a two-year high versus the dollar ahead of a Group of Seven meeting and on expectations of a euro zone rate rise in June.

It is now within 1-1/2 cents of a record high set in 2004.

A weaker dollar gives buyers more purchasing power in dollar-denominated gold, which is also often seen as a hedge against oil-led inflation.

Oil topped $64 a barrel, extending a 3 per cent gain a day earlier, as traders pondered a series of refinery outages in the United States that drained gasoline stocks as the typically heavy summer driving period approached.

Despite gold's range-bound trading pattern, analysts said the metal would set new highs further forward.

We therefore continue to expect gold prices to rise to $750 by year end, it said in a report.

Deutsche Bank saw gold prices rising to $740 in the long run.

In other metals, palladium traded just below an 11-month high of $372 an ounce hit on Thursday.

Spot was quoted at $370/375, against $367.50/$372.50 in the US market.

It's purely speculative and I don't think the fundamentals justify the move, Briggs said, adding palladium attracted good buying on a market perception that it had gained less than other metals in recent weeks.

Platinum was down $1 at $1,264/$1,267 an ounce, while silver was at $13.85/13.88 an ounce, versus $13.84/13.89.—Reuters